Fabbrica Italia

The carmaker that made history

Nicole Battafarano
June 30, 2011

Anywhere you might go in Florence, it seems, the FIAT brand is there. Its presence is marked by the old navy blue logo and the new red one on cars and advertisements, an indicator of both the company's success and the brand's popularity in its home country. Indeed, the FIAT name is iconic in Italian culture, notable today for its luxury sports cars as well as its recent takeover of the American giant, Chrysler. But here in Italy, the company extends well beyond automobile production. The corporation has played a significant role in Italian life, business and culture, acting as the most prominent driving force behind its social and industrial progress for over a century.


It all began with an idea for a ‘horseless carriage' in the late nineteenth century, a project by Count Emanuele Bricherasio di Cacherano, who wanted to manufacture and mass-produce this new vehicle. On July 11, 1899, his vision became reality as investors met to sign a contract to establish the Societa Anonima Fabbrica Italiana Automobili Torino, later shortened to FIAT.


In 1900, the company opened its first automobile factory, in Carso Dante, with a staff of 150 working the production lines. In its first year, the factory manufactured 24 automobiles. Among these was the company's original model, the 3/12 HP, a small automobile that could reach 35km/hr but had no reverse gear. This model established the FIAT name, and its design was the base for notable cars such as the Balilla (1934) and the 500 Topolino (1936), two of the company's most successful and iconic models.


In 1902, investors named Giovanni Agnelli managing director of the FIAT group. He brought to the position instinct and business acumen, combined with his passion and determination to make the company a success. Under his leadership, FIAT prioritized expansion and mass production, and its products became popular with Italian consumers. On the wave of this success, FIAT expanded operations overseas, establishing the US FIAT Automobile Company in 1908, an impressive feat after only eight years of being in business.


A pioneer in Italian industrialism, the company spearheaded new manufacturing practices and constantly strove to improve its mass-production processes. Turin's Lingotto factory, established in 1922, is a symbolic structure of Italian industrialism. The factory, five stories high with a racetrack on the roof, made unique use of architecture to modernize the assembly line. Raw materials entered at the ground floor, making their way up the five stories of the building and emerging on the roof as a finished car. There, on the racetrack, each automobile was put through a series of test-drives to ensure its quality. The Lingotto factory was considered an exemplary structure in Italian automobile industry, producing 80 different models well into the 1970s. In 1937, FIAT's Mirafiori plant, also in Turin, brought improvements as well, further improving the company's manufacturing methods and streamlining production. FIAT brought new concepts of mass production and assembly to Italy, leading businesses to reorganize their own production practices and improving the country's industry overall.


Wartime brought enormous success for FIAT. Through contracts with the Italian government, its factories manufactured weapons, airplanes, and military vehicles, producing the highest ratio of exports among all carmakers. To meet higher production demands, FIAT needed a larger workforce, and a new generation of workers migrated from the south and the rural areas of Italy to cities in the north-Milan, Genoa and Turin-a population shift that worsened the already wide economic gap between northern and southern Italy.

FIAT's success continued after World War II, during Italy's economic boom of the 1950s. Increases in average incomes changed consumer habits, and Italians began to strive for the new and exciting ‘American lifestyle' of expensive cars and summer vacations they saw in Hollywood films and celebrity visits to Italy. Films such as William Wyler's Roman Holiday and Frederico Fellini's La dolce vita document these fabulous years in which FIAT cars, both utilitarian and luxury models, became Italian icons and status symbols, causing sales to skyrocket. During this period, FIAT created the FIAT 600 in 1955 and began production of the celebrated new model of the FIAT 500 in 1957, followed in 1960 by the Giardinetta version, a precursor of the station wagon style. Consumers appreciated FIAT for its small size and luxury status.


With its success following the war, FIAT worked to unite Italy geographically through the construction of the Autostrada del Sole (also known as the A1), the first four-lane, two-direction motorway that stretched 220km from Naples to Rome. In partnership with Italian industrial companies ENI, Pirelli and Italcementi, FIAT helped to establish SISI (Develop Initiatives Italian Road), a collaboration that designed this Autostrada and donated the plans to the state. Construction began in 1956 and was completed in 1964.


The Autostrada del Sole was a huge achievement for Italy, improving delivery of goods and connecting the long-divided North and South, thus fostering tourism and trade. Italians could now explore their country with relative ease. The highway not only united the country but increased automobile sales as well. In 1969, the Automobile Club of Italia reported the 731,182 cars in Italy, a 55 percent increase from the year before.


The1970s, however, brought difficult times for the automobile industry. Although the severe oil crisis and a series of poor product designs contributed to decreased sales and tarnished FIAT's reputation, other automobile companies were suffering as well and FIAT took advantage of the situation, absorbing the then-struggling Lancia, Alfa Romeo, Ferrari, Maserati, as it would Chrysler in 2009.


Its name synonymous with Italy, FIAT has weathered change and fostered social and economic improvement. Though the FIAT logos may become a blur on city streets, they are a reminder that a company can be much more than its products: it can make history.



The sky's the limit?

In 2009, under the guidance of Italian-Canadian businessman and CEO Sergio Marchionne, FIAT began negotiating a lucrative partnership with Chrysler, then on the brink of bankruptcy. Through bailout loans by the U.S. government, Chrysler has almost paid back its 8 billion euro debt. How? It refinanced its debt with private investors, won over by what many have called ‘the deal of the century' with FIAT. The deal with FIAT did not involve cash but was an accord, according to Marchionne, that would pay off for both companies because it was based on reciprocal interest. The reinvention of Chrysler, however, is not yet complete, so it is far too soon to declare the success of the transatlantic merger. Today, FIAT owns 46 percent of Chrysler and, thus its cars have made a return to the U.S. market, their first appearance since 1983. With the showrooms of 128 dealerships marketing FIAT's small-sized automobiles and sports cars, this may be just another chapter in the Italian carmaker's grand tradition of historic industrial achievements.



Fiat celebrates Italy

To celebrate 150 years of Italian unity, Centro Storico Fiat has opened to the public for the first time. The Centro Storico Fiat is located in a Liberty-style building at via Chiabrera 20, Turin, which was the 1907 site of the first expansion of FIAT workshops on Corso Dante, the company's first home. Until November 27, 2011, visitors can admire (for free) the collection of FIAT automobiles, engines, mementos, models and advertisements spanning the company's history, from the 31/2 Hp to the impressive Mefistofele, which in 1924 beat the all-time world speed record. Visitors can also get a close-up look at the one of the first automobile assembly lines and the origins of one of Italy's largest private industrial enterprises. For more information, see www.fiatindustrial.com.



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